How Intellectual Property relates to E-Commerce

In this article, Varun Varma discusses How Intellectual Property relates to E-Commerce.

Introduction

Intellectual Property (IP) is a legal term that has been associated with industrial property with copyrights and other rights in the similar field. It is a process where someone creates anything from their mind like inventions, literary, artistic works, designs, symbols, names and images which are used in commerce.[1]. The essence of IP in India is well established at all levels i.e Statutory, Administrative and Judicial. India in its meeting with World Trade Organization had ratified an agreement which is in relation to Trade Aspects of Intellectual Property Rights (TRIPS) which was enforced on 1^st January 1995. As per the agreement, there shall be minimum standards for the protection and enforcement of intellectual property rights in member countries which are required to promote the effective and adequate protection of intellectual property rights with a view to reducing distortions and impediments to international trade.[2] The main pillars of Intellectual Property law are copyrights, patents and trademarks and these three pillars are governed and described fully under the respective statutes which are Indian Copyrights Act 1957, The Patents Act 1970 and The Trademarks Act 1999.

According to Merriam Webster, E-Commerce refers to that activity that are related to buying and selling of goods and services over the internet.[3] Intellectual Property in E-Commerce is perhaps the most neglected, yet the most essential and value bearing component of E-Commerce.[4]

According to Michael Dertouzos foreword in Tim Berners- Lee’s book, Weaving the Web, “Technology is an inseparable child of humanity and that for true progress to occur, the two must walk hand in hand, with neither one acting as servant to the other”

Importance of Intellectual Property in E-Commerce

Intellectual property law protects against disclosure of trade secrets which further signifies protection against unfair competition. This makes the intellectual property an asset which is more valuable than owning a tangible asset. This is most clearly visible in the field of technology and the digital economy.[5] If there was no intellectual property practices and statutes governing the functioning of IP laws, there would have been no new creation of works and hard work of someone could be stolen and it would have spread around the world without paying any cost to its creator for his labor on the invention.[6]

The two primary areas which are in relation with Intellectual Property which must be taken care of are

1. Safeguarding your own intellectual property

One of the common mistake committed by the owner of the intellectual property owner is to reveal the intellectual property prior to filing for protection of that property. Similarly, in many countries making trade secrets public automatically dissolves any protection[7].

2. Violating someone else’s intellectual property

As E-commerce websites who are in the business of buying and selling of products often infringes the intellectual property laws by portraying the description of products and showing their images. There are several essentials which must be followed for not infringing the IP laws are as follows:

• It must be your own creation
• Permission granted by the creator to use.
• It must be under the ambit of public domain
• It is covered under fair use.[8]

Kinds of E-Commerce

E-Commerce or Electronic commerce refers to the business done online. So a company’s website can be a great tool the business online and for the purpose of generating sales[9]. E-Commerce is classified into four main categories:

1. B2B(Business to Business)

Companies doing business with each other like manufacturer selling to distributors and wholesalers selling to retailers. Pricing of these products are negotiable on a number of products ordered.[10]

2. B2C (Business to Consumer)

Business to consumer (B2C) is a business transaction between a company and a consumer or consumers who are the end users of its product or services. B2C is different from B2B model as B2B refers to the business between 2 business entities. All the business companies who directly sell to the consumers can be put in the category of B2C companies. This term became immensely popular during the dotcom boom of the late 1990s, when it was mainly used to refer to online retailers[11].

3. C2C (Consumer to consumer)

A consumer to consumer is that kind of a business model which is connected between two consumers and the mode of doing business is online. There are two modes of implementation of C2C markets i.e actions and classifieds. C2C marketing has gained a major boost over the internet through the companies like Ebay and Craigslist[12].

4. Consumer to Business (C2B)

Consumer to business is an exceptionally authentic and plan of action where a shopper creates an item or administration that an association uses to finish a business procedure or with the end goal of picking up an upper hand. This technique transposes the conventional business to buyer (B2C) model.[13]

Elements granted protection in Intellectual Property

There are several parts of websites which are vested with the protection of different kinds of Intellectual Property.

• E-Commerce systems, search engines or other technical Internet tools is granted protection under Patents or utility models.
• Software includes the text-based HTML code which are used in websites and it is vested with a shield under Copyrights Act or patents law, depending upon national law.
• Website design is protected under copyright.
• All the website content in the form of written material, photographs, graphics, music and videos are protected under Copyrights.
• Databases can be protected by copyright or by sui generis database laws.
• Business Names, Logos, Product names, domain names and other signs posted on the website are covered under Trademarks.
• Computer generated Graphic Symbols, displays, graphic user interfaces (GUIs) & even webpages are protected under Industrial Design Law.
• Hidden Aspect of a website like (confidential graphics, source code, object code, algorithms, algorithms, programs or other technical descriptions, data flow charts, logic flow charts, user manuals, data structures and database contents) are protected under Trade Law Secrets.[14]

Ways to protect a website under Intellectual Property Rights

There are essential measures which are mentioned in IP Laws which protect a website from abusive use. These are as follows:

1. Protecting Intellectual Property Rights

2. To let people know that the content is protected under IP Laws.

3. To make sure people know what all content can be used by them.

4. Controlling access and use of your website content.[15]

Conclusion

As E-Commerce is an industry which is growing at a rapid rate. And there can be various instances where creation and invention of someone can be accessible without even giving the person enough credit, labor and money is not given to the inventor. So for this purpose Intellectual Property plays a very vital role. It gives protection to almost all the content which is available over the internet. There are several E-Commerce businesses which are performed between the businessman or company and consumers whereas for the purpose of making these transactions more safer, intellectual property plays vital role.

 References

[1] Wipo, What is intellectual property?, WIPO, available at www.wipo.int/about-ip/en/.

[2]India in Business Ministry of External Affairs Govt. of India Economic Diplomacy Division, Investment: Intellectual Property Rights, available at indiainbusiness.nic.in/newdesign/index.php?param=investment_landing/267/3.

[3] Merriam Webster, Definition of E-Commerce For English Language Learners, available at www.merriam-webster.com/dictionary/e-commerce.

[4] Ajeet Khurana, Intellectual Property in Ecommrce: Your Greatest Asset, THE BALANCE (28.02.2017), www.balance.com/intellectual-property-in-ecommerce-your-greatest-asset-1141708

[5] Ibid.

[6] Ibid.

[7] Ibid.

[8] Ibid.

[9] Wipo, Intellectual Property and E-Commerce: How to Take Care of your Business Website, www.wipo.int/export/sites/www/sme/en/documents/pdf/business_website.pdf

[10] DigitSmith, Ecommerce definition and types of ecommerce, www.digitsmith.com/ecommerce-definition.html.

[11] Investopedia, Business to Consumer-B TO C: What is ‘Business to Consumer- B TO C’, www.investopedia.com/terms/b/btoc.asp.

[12]Investopedia, Customer to Customer (C2C): What does ‘Customer To Customer (C2C)’ mean, www.investopedia.com/terms/c/ctoc.asp.

[13] Techopedia, Consumer-To-Business(C2B), www.techopedia.com/definition/23258/consumer-to-business-c2b

[14] WIPO, Intellectual Property and E-Commerce: How to Take Care of Your Business’Website, www.wipo.int/export/sites/www/sme/en/documents/pdf/business_website.pdf

[15] Ibid.

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